Net Income Per Share

6 Months Ended

Jul. 31, 2020

Basic net income per share is computed by dividing net income by the weighted-average number of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of common stock outstanding and potentially dilutive securities outstanding during the period, as calculated using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock units (“RSUs”), including performance stock unit (“PSU”) awards, and stock options, including purchase options under VMware’s employee stock purchase plan, which included Pivotal’s employee stock purchase plan through the date of acquisition. Securities are excluded from the computation of diluted net income per share if their effect would be anti-dilutive. VMware uses the two-class method to calculate net income per share as both classes share the same rights in dividends; therefore, basic and diluted earnings per share are the same for both classes.

The following table sets forth the computations of basic and diluted net income per share during the periods presented (table in millions, except per share amounts and shares in thousands):



	Three Months Ended				Six Months Ended
	July 31,		August 2,		July 31,		August 2,
	2020		2019		2020		2019
Net income attributable to VMware, Inc.	$	447	$	5,303	$	833	$	5,683

Weighted-average shares, basic for Classes A and B	420,031		416,983		419,208		417,310
Effect of other dilutive securities	3,019		8,108		3,220		8,734
Weighted-average shares, diluted for Classes A and B	423,050		425,091		422,428		426,044
Net income per weighted-average share attributable to VMware, Inc. common stockholders, basic for Classes A and B	$	1.06	$	12.72	$	1.99	$	13.62
Net income per weighted-average share attributable to VMware, Inc. common stockholders, diluted for Classes A and B	$	1.06	$	12.47	$	1.97	$	13.34

The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands):



	Three Months Ended		Six Months Ended
	July 31,	August 2,	July 31,	August 2,
	2020	2019	2020	2019
Anti-dilutive securities:
Employee stock options	170	—	233	—
Restricted stock units	5,727	458	4,664	251
Total	5,897	458	4,897	251